How to Implement a Membership Program in Your Small Business
In 2025, the biggest hurdles for small businesses are inflation and a lack of capital or cash flow. These challenges obviously eat away at bottom lines, but more than that, they can make it tough for small businesses to plan ahead or expand into new markets.
Inconsistent cash flow can be a constant source of stress that makes it hard to strategize or work toward your goals. However, implementing a membership program that promotes customer loyalty and provides a reliable revenue stream stabilizes your income. With this steady flow of revenue, you’ll be better equipped to scale up your business and craft a sustainable business plan.
This guide will cover the four key benefits of membership programs and a six-step roadmap for setting up your own program, including everything from developing your pricing structure to organizing benefit delivery.
4 Benefits of Small Business Membership Programs
Ever purchased a gym membership or used a loyalty punch card to earn a free coffee? If so, you know that these programs incentivize customers like you to visit the business more often to take full advantage of the membership or work toward that free item.
In addition to boosting the frequency of customers’ visits, a membership program can offer key advantages like:
- Predictable, recurring revenue. As we hinted in the introduction, membership programs create a stable revenue “floor” or baseline that can help smooth out some of the more volatile seasonal or market fluctuations. In other words, you know you can count on a certain chunk of revenue each month, whether it’s the busy holiday season or your slowest month of the year. This enables better, more accurate budgeting and future investment planning.
- Increased customer lifetime value (CLV). CLV is the total revenue a business expects to receive from a single customer throughout their relationship. Membership programs prioritize retention, which tends to be much more cost-effective than acquiring new customers. These programs also encourage members to purchase your products or services more often and refer their friends and family, further increasing CLV.
- A stronger sense of community. Loyalty programs create a sense of community and exclusivity, moving your relationships with customers beyond the transactional. The “member” title and insider perks like discounts or early access to new products make members feel special and valued.
- Streamlined service delivery. By storing members’ personal information, payment details, and preferences, businesses can offer faster checkouts and a more convenient experience. Additionally, businesses can use this information to make personalized recommendations. For instance, if a hair salon member always schedules a monthly haircut, the salon might pre-book the appointment and send them an email to confirm in one click.
A CRM—such as Flowlu—can store member details, preferences, and purchase history so your team can deliver faster checkouts and personalized service without digging through spreadsheets.
Plus, loyalty program members are usually more open to trying new services or splurging on add-ons and luxury packages. After all, they've already shown how much they love what you offer by signing up for an ongoing membership. This means you can focus your sales efforts on the customers who are most likely to generate significant revenue.
Launching Your Small Business’s Membership Program
Like any new initiative, launching a membership program can seem overwhelming at first. However, getting organized and breaking the process down into manageable, bite-sized tasks will help you chip away at implementation. Set realistic deadlines for key tasks, delegate tasks to other team members as needed, and set up regular check-in meetings to track progress.
To help you get started, we’ve divided the process into the following steps:
1. Define your value proposition and tiers
A value proposition is a feature or offer that makes a company—or, in this case, a program—more attractive to potential buyers. This proposition should be clear, compelling, and convincingly answer the question, “Why pay monthly?”
Typically, this means providing exclusive discounts, priority booking, early access, personalized services, complimentary add-ons, and other perks. A dog grooming business might pitch their program to customers like this: “Lock in exclusive member-only pricing and enjoy predictable monthly payments that make premium, consistent grooming surprisingly affordable.”
Once you’ve established what makes your membership program worth the price tag, you’ll need to set up a tier structure. For new programs, it’s best not to use more than three simple tiers for basic, middle, and premium offerings. Here’s what each tier should include, along with an example of what the dog grooming business might offer:
Base: Features the most basic offerings, but still offers more value than what non-members get.
Example: One standard bath and brush per month, one complimentary nail trim, and a 5% discount on any additional services.
Middle: Adds an additional tangible, recurring product or service.
Example: Includes all base-tier benefits and one full-service grooming session per month, one complimentary tooth cleaning, and priority booking access.
Premium: Offers the highest level of personalization and/or white-glove service.
Example: Includes all base- and middle-tier benefits and one additional luxury bath and haircut, unlimited walk-in nail trims, complimentary choice of one luxury spa add-on, and a 10% discount on all retail products.
From here, you can infuse some of your brand personality into the program. For instance, rename the plain tier names to something like “The VIP (Very Important Pup) Experience.”
Once you define your benefits and tiers, document everything in your internal workspace or CRM. For example, Flowlu lets you organize tier descriptions, member perks, and internal guidelines in one place so your team stays consistent.
2. Develop a pricing strategy
While this is listed as step two, you’ll likely need to develop your pricing strategy in tandem with your tier structure. This can be a more cyclical process. You might brainstorm exclusive offerings, tally their costs, develop a pricing strategy, and then repeat until you find the sweet spot.
Start by calculating your baseline costs, factoring in labor, product usage, and time. This number represents the minimum that your membership pricing should cover. Next, add up the full, non-member value of each service offered in a tier, and ensure that the membership price point offers a discount of at least 15% to 25%. Remember to compare your prices against your competitors’ pricing to understand the current market baseline.
Consider billing cycle options at this stage as well. Will you charge members monthly, quarterly, or annually? Keep both the benefits and tradeoffs of each option in mind. Shorter billing cycles offer more flexibility, but they may also have higher churn rates. On the other hand, longer cycles often have higher retention but must be incentivized (e.g., “Get 2 months free when you purchase a yearly membership!”).
3. Leverage the right technology
Launching a membership program is a big undertaking, requiring you to develop the program from scratch, set up program infrastructure, create compelling digital marketing messages, and more. Using the right tools and technology can help you stay organized and make consistent progress.
Here’s how technology can assist with the launch and ongoing management of your program:
- Planning and task management: To keep a handle on all of the moving parts, use dedicated project management software. These tools are designed to help you plan and execute big projects, encouraging team-wide collaboration and accountability. Choose software that allows you to create workflows of varying complexity, automate workflows like task assignments, and track project management analytics.
- Mapping the onboarding workflow: Onboarding confirms the customer’s purchase, recaps benefits, and ensures they know how to redeem them. The process includes a mix of behind-the-scenes and client-facing steps, including granting access to the member portal, sending welcome emails, adding them to your member list, and fulfilling incentive offers. You’ll likely need a few tools here—your CRM, project management software, and an email marketing platform.
- Managing members and tracking benefits: You’ll need a central platform to store your full list of members and key member data. Your CRM should be able to manage this, although you may need to set up custom fields or tags to identify members. Additionally, ensure member profiles include their tier to ensure each member receives the right perks.
- Scaling communications: Leverage your CRM and/or an email marketing platform to set up automated, segmented outreach. Use this method to promote your membership program and to target current members with relevant communications. Reduce staff strain by setting up automated triggers for your welcome series, booking confirmations, and renewal reminders.
Depending on what your business offers, you may need additional tools to effectively run your membership program on a large scale. If one of the perks is free or discounted services, confirm ahead of time that your current scheduling or booking software can manage these exceptions without the need for manual intervention or clunky workarounds.
4. Plan benefit delivery
Planning and preparing how you’ll deliver program benefits before enrolling your first member is crucial. In most cases, you’ll need to have some kind of infrastructure in place for everything to run smoothly.
Because each membership program offers unique benefits, the planning process will vary from business to business. However, these tips for common types of benefits can help you get started:
- Financial benefits (members-only discounts, sales events, etc.): Program member discounts directly into your POS or CRM. This way, the discount will be applied automatically to ensure consistency and prevent human error.
- Priority access (priority booking windows, members-only hours, etc.): Set up a private, members-only booking link or allow them to book via your member portal to automate priority access. Notify these members of last-minute openings or new appointment slots by creating a “VIP members” segment in your email message list.
- Exclusive content (in-depth guides, behind-the-scenes content, etc.): Create a six-month content calendar to host gated content. Ensure all previous content is automatically archived and easily searchable to grow a valuable resource library over time.
- Recognition or status perks (a physical membership card, free birthday gift, etc.): Automate personalized birthday or membership anniversary emails that contain a special offer or reward, ensuring no one gets missed.
Take this time to identify any gaps in your current tech stack. If your POS system isn’t robust enough to manage special member pricing, for instance, it’s likely time to upgrade.
5. Test and gather feedback
Next, let real customers test your membership program. Using your CRM, identify customers you have established relationships with and pitch the program to them. Depending on the size of your business, aim to enroll 20 to 50 customers at a discounted rate. Frame this as a beta launch that will be used to identify onboarding issues, technical glitches, confusing processes, and any other friction points.
After at least three months of opening up the program, survey your test subjects by asking questions like:
- On a scale of 1-10, how satisfied are you with the membership program?
- Which of the membership benefits have you found most valuable?
- Are there any benefits you don’t find valuable or don’t use?
- How easy has it been to use your benefits?
- Considering the monthly price of [Full Membership Price], how would you describe the value of the program? (Provide options: Excellent, good, fair, poor)
- If you could change or add one thing to the program, what would it be?
- In your own words, what is the biggest advantage of being a member?
Document this feedback, identifying recurring themes. Translate your findings into action items and create tasks for the issues or ideas you plan to address in your project management system. Resolve major issues before launching the program publicly.
As feedback rolls in, log action items in your project management tool. If you use Flowlu, you can convert each insight into a task, assign owners, and track improvements until you’re ready for a full launch.
6. Launch and promote the program
Finally, it’s time to launch your membership program to all of your customers. Plan a multichannel marketing campaign to promote the campaign via email, social media, text, your website, direct mail, and any other marketing channels your business uses. Track key performance indicators (KPIs) like response rate, click-through rate, and conversion rate for each channel.
Remember to actively steward your members to boost retention. Consider setting up check-ins with new members after the first 90 days of their membership to identify any gaps or troubleshoot issues they have. This could be a simple automated email with a survey or a personal phone call, depending on the size of your program.
Final Words
Membership programs are an effective way to reward your most loyal customers and recruit new ones by offering exclusive, competitive deals. However, to kick off your program successfully, you need to plan the rollout process carefully, choose technology that will make implementation a breeze, and test out each step and perk for yourself. From there, stay open to customers’ feedback and suggestions to stay competitive in your market.
A reliable system to manage members, tasks, and communications helps keep your team organized as your program grows. With the right structure in place, you’ll be able to maintain consistency, reduce manual work, and give your members a smooth experience from day one.
You can start by choosing the benefits you want to offer, setting clear pricing, picking a system to manage members, and testing the program with a small group before launching it to everyone.
Most businesses base their prices on the cost of the services included and then offer a small discount compared to buying those services one by one. You can also look at what similar businesses charge to find a good range.
You’ll need a way to track member details, take payments, send updates, and manage bookings or benefits. Many small businesses use a CRM, a payment processor, and simple automation tools to keep everything organized.
