Last week, we hosted a webinar with author Robbie Kellman Baxter about her book, The Membership Economy, and what the move from ownership to membership means for every business.
We had a great live turnout and a lot of follow-up questions and interest. If you missed it and want to catch up, click here to check out the recording and slides.
If you just want to catch the highlights and big picture, here’s a recap. (One takeaway? Give people options in how to consume content!)
Here’s an upfront confession: Even though I knew quite a bit about what we were going to cover ahead of time, and I’ve read the book a couple times, I still found myself scribbling down notes.
If I could summarize the whole thing under a big umbrella, it would be this statement (which had its own devoted slide in the webinar):
Any Customer-centric Company That Develops Ongoing, Formal Relationships With Customers Is A Membership Organization.
On the surface, it’s a broad statement that sounds nice. If the only criteria is a formal relationship mechanism, then just about any business is a membership organization. But, as Robbie pointed out, the customer-centric portion is the more important part of the equation.
Just because you have a membership model doesn’t mean you’re part of the Membership Economy. The Membership Economy is more about a mindset than a model. It’s about focusing on member relationships from every aspect of an organization.
As a result of that commitment, these organizations focus on adding ongoing value, rather than making the big sale. Which is one of the key differences we covered - “continuous innovation” is the way Robbie phrases it.
The New Revenue Model
Another way this attitude manifests itself is in customer service interactions. To Robbie, a “customer success” team doesn’t just try to limit call times and minimize anger. They “maximize loyalty” by being helpful human beings. They add value and build relationships.
This customer-centric transition has to be making some old school executives nervous. The traditional measures of success (conversions, transaction size, etc) are being replaced by metrics that appeal to a much larger picture (retention, customer lifetime value, etc).
The crazy thing is, the potential profitability from a member-focused approach is far greater than a never ending cycle of sell-and-churn.
This Isn’t Easy Street
Another aspect we covered is the changing acquisition funnel. Whereas the traditional funnel ends when someone hits the bottom, the new membership funnel is more like an hourglass. When someone becomes a customer, they drop into a reverse funnel, wherein the company constantly works to maximize their lifetime value and loyalty.
This is the point where it dawns on people that, while the Membership Economy focus sounds really nice, it’s a lot of work. There is no end to the hour glass funnel - every customer, whether they’re disengaged or a “superuser” has to constantly see the value of being in business with a company.
It’s worth it though. As Robbie points out, once you’re able to earn the trust and loyalty of customers, they’ll begin to feed the top of your funnel with referrals.
A New Frontier
Focusing less on making the big sale isn’t the only aspect of business that’s going to make traditional leadership sweat. Many of the tactics we covered are a bit scary - freemium models, tiered pricing, outsourcing certain functions, building communities for customers to engage each other, and investing in valuable member benefits.
This is why that organizational commitment to members is so important. The idea of membership as a business model isn’t all that new, but the idea that just about any business can utilize the model is. But it has to be approach almost like a marriage, with both the company and the customers having equal powers, with an ongoing give and take and high level of transparency.
Chances are those of you reading this have those “formal relationships,” but perhaps not the customer-centricity. Or, the opposite - a company that goes all out for customers, but is missing out on revenue opportunities by not exploring a membership model.
Either way, I think you’ll truly enjoy the webinar and hearing what Robbie has to say. Much like her book, she offers up a ton of useful, crunchy, actionable information
Click here to check it out, and keep an eye on this blog as we’ll post Robbie’s responses to questions submitted during the webinar that we weren’t able to get to.