We’ve discussed how memberships can help established businesses take performance to the next level. But what if you’re the new kid on the block?

Let’s visit New Bedford, MA, nicknamed The Whaling City because during the 1800s, it was one of the most important whaling ports in the world. And you know we’re all about whales.

Recently launched and appropriately named, the Moby Dick Brewing Company is a brewpub and New Bedford’s first full beer production operation. And with creative product names like the Ishm-ale, they have a fun time embracing the local history.

The Challenge to Entering the Local Market

While the Moby Dick Brewing Company was the first full beer production operation in the area, there were already several other brewpubs in town. So the team at Moby Dick needed to find a way to shift loyalties or attract a whole new crowd.

But how do you do that when you’re competing with already established and beloved local institutions?

To find out, we caught up with Michael Warren, General Manager of the Moby Dick Brewing Company, to learn what they did to develop a group of regulars—what we would call whales.

Michael didn’t just look at what the competition was doing and copy their tactics. Come on, everyone has a loyalty points program. That’s not special. So Michael went out to study both the competition and talk to folks he thought would make for good regulars.

Welcome to the Mug Club

All of this research led to the creation of the Mug Club. Like we said, this is no ordinary loyalty program.

Sure, the Mug Club does have a component that involves incentives and coupons, but there’s also a bigger purpose. For $50, club members get their own mug, which they can decorate and keep on display; recognition in the form of free dessert on their birthdays; and an invitation to the company’s Christmas party.

Did this sell—and more importantly, produce regulars?

Membership sold out in less than a week! It was a huge hit. Furthermore, at any given time, there are a handful of Mug Club members seated at the bar, using their customized mugs. The mug with an old-school MTV logo sticker seems to get a lot of attention.

All this excitement grabs the attention of the “fish” who would love to join but can’t because the club is sold out. There’s some excitement about being added to the waiting list, with the hopes they can join when other members leave or when there is an expansion in number of available positions. Members effectively become marketers for the brewing company.

Members visit so often that any discounting is more than offset by volume, plus the positive vibe they create in the brewpub. On any given day, Michael estimates that about 30 percent of the membership base comes in. Imagine if you could get almost a third of your members to spend money with you every single day!

The new business is thriving overall on the back of this successful Mug Club.

What Did They Get Right?

Michael and the team customized a membership that not only met the wants and needs of his target audience, but also was explicitly distinct from what everyone else was doing. Copycat strategies don’t work, especially if you’re the new player in town.

They also added emotional benefits in the form of:

• Exclusivity, as in, “Ha, ha! You have to go on the waiting list!”
• Importance, as in , “Hey, check out my cool mug.”
• And special treatment, as in, “I’m a part of the Moby Dick family. I get to go to their big holiday party.”

These emotional benefits make the membership much stickier than if it were only about discounts. If your program is based around saving money, members will always do the math to see if they’re coming out ahead or not. If they find they’re not, they won’t hesitate to cut you loose. A true membership program builds brand loyalty through that personal, emotional connection.

So, what’s next for the Mug Club? The Moby Dick team is always thinking of new ways to enhance the program and are considering expanding the number of members. People are still clamoring to join the waitlist, and the program continues to pay dividends to the brewing company. This is a true success story of how a membership program helped a new company gain a lot of ground quickly.

About the Sterling Woods Group, LLC

The Sterling Woods Group’s mission is to help clients make sense of their data to build deeper relationships with their best customers, launch new products and membership programs, and execute smarter marketing strategies.

We use a hypothesis-driven, data supported methodology to discover your “spin”—a simple insight that no one else is paying attention to. Then, we help you assemble the right technologies, marketing plans, and resources to seize this opportunity.

About the Author

Rob Ristagno, Founder and CEO of the Sterling Woods Group, previously served as a senior executive at several digital media and e-commerce businesses, including as COO of America’s Test Kitchen. Throughout his career, his focus has been on embracing technology and analytics to spur strategic development and growth.

At the Sterling Woods Group, he and the team are passionate about helping clients understand their best customers through data, and developing products and membership programs that exceed expectations – and generate impressive revenues.

Committed to spreading this message, Rob is the author of A Member is Worth a Thousand Visitors and is a regular keynote speaker at conferences around the world. He has been featured on ABC, NBC, CBS, Fox, and Digiday.

He holds degrees from the Harvard Business School and Dartmouth College and has taught at both Harvard and Boston College.