You used to pick up movies from Blockbuster. You used to download and install office software. You used to buy physical media such as CDs.
Odds are you were doing these things as recently as a couple years ago. Now, there’s a good chance you do none of these. In fact, instead of owning a CD, you’re paying someone else each month to access music they own, on their servers.
You’re probably very happy to be doing it, even.
And it’s because of The Membership Economy (as coined by author Robbie Kellman Baxter).
Netflix, Pandora, Spotify, and others have changed how we consume media. Microsoft and Adobe have switched the classic software model on its head.
Owning stuff is great, but we’re making tradeoffs, and in many cases, it’s good. We don’t own software any more, but we’re getting the latest and greatest updates. We’re no longer owning movies or music, but we get access to most of the new releases.
And now it seems like every industry is getting in on the concept. Whereas you used to go into a store to discover and purchase clothes, you can now get a curated wardrobe sent to your doorstep monthly. You can buy an “all you can wash” membership at your neighborhood car wash. It feels like every business has a loyalty program.
Those are all examples of membership concepts in action. It’s a growing movement, and the companies doing it well are raising the stakes in the quest for customer engagement and loyalty.
“But I Don’t Have a Membership Model”
Since we announced our Membership Economy webinar last week, I’ve received one comment a few times over: “I don’t have a membership model, and I don’t think there’s a fit for one at my company. Why does this matter to me?”
First off, the evolving state of business shows that pretty much any brand can move to a membership subscription. But some brands won’t budge, and odds are they’ll be fine. But subscriptions are possible!
Second, The Membership Economy is as much about mindset than it is about model. It’s how every business approaches its customers, and what it’s willing to do to earn their purchases over and over again.
These are the questions every brand should ask itself, and to me, they form the essence of The Membership Economy:
What value can the brand add to the product - even after the purchase?
What value can the brand add to the customer - before and after the purchase?
From onboarding and introducing member benefits to collecting and utilizing data to create valuable experiences, The Membership Economy is all about customer-centricity. It’s not about what can be done to maximize revenue at any cost, but what can be done to maximize relationships - a smarter route to higher, recurring revenue.
The Membership Economy stresses constant innovation and improvement, and focusing on turning a “customer” into a “superuser.” In this world, it’s about justifying a brand’s role in a person’s world everyday.
The principles apply to any smart business, whether it’s operating a membership model or not.