Stores Turn to Membership Programs to Build Customer Loyalty

As bookstores look to turn their status as a community hub into a financially rewarding asset, many are exploring customer membership programs. Two stores that offer paid memberships share their thoughts.

Politics & Prose in Washington, D.C., began its membership program in 1995. "At that time I think it was a cost-saving measure," said Betsy Brown, the store's membership coordinator. Costs were being driven up by the high number of bad addresses on the store mailing list, and staff hoped to maintain a more accurate database by asking customers to pay $15 a year for the Politics & Prose newsletter. "And then they decided to add some basic membership benefits," Brown said.

Fifteen years later, Politics & Prose has more than 8,000 members. "We do get a lot of turnover," she said, mostly due to customers moving out of the Washington area, but many of those customers remain loyal. The store currently has members in 33 states. "It's a rare day that goes by that I don't get a reinstated member," said Brown.

Politics & Prose members receive 10 monthly event calendars by mail, "and they let us know if they haven't received it!" Brown said. (August and December, slow months for events, are combined with July and November.) The store also prints two newsletters each year, and members get discounts on the 100 to 150 books reviewed in each. (The printed newsletters and calendars are separate from the store's weekly e-mails, which are available to both members and non-members.)

Members also receive discounts on the Politics & Prose hardcover bestsellers and on a visiting author's books during the month the author's event is scheduled. In previous years members have also saved on almost everything in the store during three annual member sales, but beginning 2010, "we're now having four member sales a year," Brown said.

Besides offering members a tangible benefit, the sales also serve as a form of marketing for the membership program. "We get a lot of members who join during the member sale," she added.

Politics & Prose charges $25 for a one-year membership, and also offers multi-year memberships: $45 for two years, or $100 for five years. The store began offering the five-year membership at the beginning of 2010."I did not think that that was going to go over well," said Brown, but more than a hundred customers have since renewed at that level.

Across the country, Capitola Book Café has put together a membership program that works for the much smaller store and its community of Capitola, California. "We have different levels of membership," said general manager Wendy Mayer-Lochtefeld, with prices starting at $25 per year. "For the entry level, you get a discount off all regularly priced books and gifts," plus a gift card from the store-affiliated café, she explained, while higher levels of membership offer customers priority seating at store events, packages for off-site events, and store gift cards donated to a charity of the customer's choice.

Mayer-Lochtefeld and the store's other partners talked to Clark Kepler of Kepler's Books before launching Capitola's membership program in 2008. When Kepler's reopened in 2005, the store offered Literary Circle memberships at prices ranging from $30 to $2,500. Because Capitola serves a very different customer base from Kepler's, Mayer-Lochtefeld used Kepler's advice to develop a program with benefits that would appeal to Capitola's clientele.

"You can be very creative about what you offer and cater to your own community," she said. "It wasn't earth-shatteringly difficult" to set up the administrative end of the membership program. The store's POS system, IBID, is able to track memberships, and Capitola's bookkeeper spent some time figuring out how to record the income for tax purposes.

Mayer-Lochtefeld thinks other stores could also use membership programs as a business development tool, but her advice to booksellers thinking about starting similar programs is to "ask yourself why you're doing it." The membership fee itself is unlikely to be a big moneymaker, but "it's designed to create loyalty," she said, and that has been the case at Capitola. "It's a bit of an enhanced discount program" that offers customers a sense of community as well as discounts, and gives them a reason to keep shopping at their local independent bookstore. --Sarah Rettger