The Supply Side: Sam’s Club expands service offerings to its members

Sam’s Club, a retailer with revenue of $59 billion last year, makes its money from memberships. Under the direction of CEO John Furner, Sam’s Club has continued to try and drive more value in its memberships to create increased loyalty in the crowded retail market.

Last year, Furner simplified the membership offerings at Sam’s Club. Shoppers have two choices: the basic rate at $45 a year, or the Plus membership at $100 annually. Sam’s Club began offering free shipping for online orders for its Plus members last year as well as other savings rewards to justify the added cost.

Furner told the Northwest Arkansas Business Journal in June the company would also add more services to help drive value for all of its members. He said the free shipping perk for Plus members prompted more basic members to trade up which helps to partially fund the free delivery.

Sam’s Club recently unveiled a new home services offerings nationwide on its website. Home services are also accessible in about 300 clubs. Clubs in Northwest Arkansas and Fort Smith are among those offering home services. Sam’s Home Services will be available in all of its clubs across the U.S. by the end of the year.

Michael Bagley, senior merchant for services at Sam’s Club, told the Northwest Arkansas Business Journal the company has been testing home services for about two years. He said the reasons behind adding more services are to provide value and convenience for its members.

“Home services are typically big-ticket items and members want quality,” Bagley said. “At Sam’s Club, we are able to work with a third party to help bring our members access to services like flooring, siding, windows, kitchen cabinets and countertops, HVAC, doors, windows, gutter protection, window treatments and bathtubs.”

Sam’s Club is working with Florida-based HI3C to handle the calls and scheduling of approved dealers to perform home services. Bagley said Sam’s Club and its partners do the legwork and due diligence on the quality of the services offered.

“You know if you have ever had work done on your home, the task of getting quotes and checking reviews can be cumbersome,” Bagley said. “Sam’s Club Home Services can simplify the purchase and members who order the service online will get a Sam’s Club gift card equal to 10% of the service ticket. Members who access the service in clubs save 10% on the front-end of the order.”

Bagley said Sam’s Club works with two third-party organizations similar to Angie’s List that run the home services program. He said the dealers and partners help provide the incentives of the 10% discount or gift card.

While the services have been tested in clubs for the past couple of years, Sam’s Club recently rolled out the online home services option. Bagley said consumers who want to access home services in clubs can go to the desk in a club staffed with a representative. If there is no rep on staff, members can call an 800 number or visit the Sam’s Club website to get assistance.

The service partners will work directly with Sam’s Club members and award the incentives, which can change. Bagley said Sam’s Club members can be sure the quality of the service is in line with the company’s quality control standards.

“Our members trust us for quality items, and the same is true in services,” Bagley said. “We are continuing to expand our services offerings because our members are asking for it.”

He said Sam’s Club also partnered with smart home services provider Vivint Inc. to supply services for its membership. He said the service is offered in 280 clubs and recently launched online. Members who take advantage are saving an average of $300 per sale. There is also free installation and a $100 gift card promotion.

Members in about 100 clubs can also save on pest control through Sam’s Club’s partnership with Terminix. The service is also offered online. Bagley said the savings are about $25 per ticket. PennyMac Loan Services is also a partner with Sam’s Club to provide home mortgages to qualified members. Bagley said Sam’s Club members get discounted rates, $1,100 in loan origination fees waived and a $500 gift card.

Bagley said Sam’s Club is also working with Allstate to offer members in six clubs a streamlined way to purchase insurance and save money. While there are now no services around healthcare, Bagley said, “nothing is off-limits.”

“Any way we can provide convenience and value to our members is something we will consider. We want their Sam’s Club membership to be the most valuable membership they own,” Bagley said.

He said the loyalty play will not only retain and serve members but also recruit new members into the fold.

“This is pretty new for us, and we are trying to drive awareness to the masses about the services and values associated with being a Sam’s Club member.”

Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics and sponsored by Propak Logistics.