Are/Were Third Party Membership Clubs a Cancer to Our Industry?
With constant pressure to squeeze out every dime of revenue from consumer callers and responders from Direct Response offers, has the industry practice of selling third party membership clubs possibly caused more long term harm than good to our industry?
Not all that long ago, the “clubs” were like a gold mine for our industry. The “clubs” were new to the consumer callers and conversion rates were much higher then. The financial benefits to these “negative option renewal” offers of “30 day trial memberships” were tremendous for product marketers and the call centers alike. However, over the years, consumers have come to view these products as valueless and have complained in great numbers about the hard selling tactics deployed by marketers. I believe that many got caught up in the frenzy of making new revenues in previously undiscovered territory and cared less about whether they were of any value to consumers. Did we once consider the possible long-term damaging effects to our industry of this practice?
Offering non-relevant, third party upsells has gone unabated for years. One negative result (or positive) result depending on which side of the fence you’re on, is that consumers have complained enough to convince Legislators to outlaw some of the practices of “club” programs and introduce new proposed legislation that would allow “overreach expansion of FTC powers”, e.g., current consumer legislation that has been passed in regard to data pass and the proposed amendment of S. 3217, etc. This is another step in further regulating our industry, (on top of others), and further so-called protecting consumers from the blatant abuse as to how their credit card accounts are captured and then charged. Visa and MasterCard have also imposed their mighty rules to Merchants to protect their cardmembers from further abuse. The rules have changed the game dramatically!
Faced with legislative headwinds as well as consumer resistance, companies are starting to look for other methods of incremental revenue generation. Recent technological developments now provide solutions which can offer legitimate, high-value, and legally compliant alternatives to these low value and low conversion club membership Up-sells.
If the industry continues to offer irrelevant and uncomplimentary 3rd Party “club” memberships to the consumer callers, will we continue to experience diminishing response rates to toll free numbers and the web from savvy consumers who have been burned with this practice. I think so.