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How to combat new trends in the membership economy

Suzannah Kolbeck
June 18, 2021
How to combat new trends in the membership economy

Now more than ever, the future is built on relationships. If the past 15 months have taught us anything, it’s that how we do business has less to do with the bottom line and is more about the people who are on the journey with us. 

Subscription expert and author Robbie Kellman Baxter reminded us at SURGE Forward that now that the end of this extraordinary time of the coronavirus pandemic is in sight, more changes are on the way. That’s why it’s even more important to lay off the brake, to step on the gas, and to continue to innovate and develop your membership and subscription services. 

With relationships at the core of everything you do, here’s how to optimize your membership and subscription offerings to attract, engage, and retain your members in 2021 and beyond.

The membership economy in the COVID era

The membership economy has grown, even in the years before COVID. The membership and subscription model works to build forever relationships by doing the following:

  • Changing the focus from the single transaction to the long-term relationship 
  • Transforming revenue from a single large payment to multiple smaller payments 
  • Encouraging conversations between the organization and the members themselves

The membership economy is about how everybody in your organization treats the people you serve.  Whether your organization is new to the membership economy or an old pro with a seamless program, business is changing and will continue to do so as we emerge into a “new normal.”

Been there, done that: adapting to the membership economy

Consider it a compliment that other organizations are increasingly focusing on treating customers like members - something that you have been doing for ages.  

It has never been easier to build sophisticated, engaging experiences for the people you serve. Whatever you can imagine is possible with technology.  There are off-the-shelf solutions and vendors to help you implement and analyze your results. It’s a great time to experiment. 

The other good news is that consumers and businesses have never been more receptive to new ways of doing things. The world has been operating in a 15-month grace period, with permission to innovate and make mistakes while our members are willing to try new ways of getting things done. 

But the bad news? The market for membership is crowded and noisy right now. This can lead to “subscription fatigue” that impacts long-term relationships with your members and subscribers (more on that below!).

The anatomy of a new beginning 

Wherever you are in your journey of membership, you can establish, deepen, and expand your relationship with new and returning members.  

Consider this in three phases.

Phase 1. Launch

Launch is the beginning. You are:

  • Finding product/market fit
  • Building support from your organization
  • Setting expectations
  • Getting clear on the forever promises that you're making to your members

This phase drives loyalty. Build trust here so members stay with you as you experiment and innovate. 

Phase 2. Scale

Scale transforms the culture of your organization. The focus here is on recognizing the importance of engagement and retention (not just acquisition). 

Key aspects of this phase include:

  • Building technology to support your offerings
  • Developing pricing
  • Defining metrics to measure success
  • Thinking about mergers/acquisition

Phase 3. Lead

The final stage is all about resisting shortcuts. 

Your long-term loyal members want you to continue to hold yourself to the high standards you set early on. Continue to innovate. Continue to provide value. 

Your forever promise stays constant, but how you deliver on that promise is going to change. 

  • Stay “forever young” in your offerings
  • Keep a global perspective 
  • Look at trends and changes to what people actually need 

It helps to view your memberships through a microscope and a telescope.  Focus both on the needs of your long-term members (microscope) as well what’s going to drive new members to join (telescope). A balance of these two visions will drive growth and continue to foster deep, trusting relationships with all members.

Combatting subscription fatigue

There are three big culprits that drive subscription fatigue. Each has a unique solution that can serve both you and your members.

1. Poor product/market fit

When the membership doesn’t fit the offering with the audience, people will begin to question why they joined in the first place (and why they are staying once the thrill is gone). Maybe the headline benefit that attracted members during COVID is no longer necessary or relevant.

The solution to this is simple: evaluate your benefits and offerings and adapt. Look for new ways to deliver on that forever promise you made to your customers.

2. Member guilt

Member guilt occurs when your customer loves your extensive benefits but feels bad for not using them. Contrary to popular opinion,  having too many benefits drives cancellation just as much as not having enough.

Take stock of your membership. Balance the right-size offering for your members with their needs. Be disciplined about what you offer. Consider what you need to add or remove so that it's not overwhelming and every benefit is truly valuable. 

3. Hiding the cancel button

It may seem like a good strategy to hide the cancel button, but this is another driver of subscription fatigue and a poor model for community relationships.  

In the short-term, hiding the cancel button may result in a spike in revenue. In the long-term, it hurts your brand. People who experience challenges trying to cancel share that experience. The end result? If  potential members know it's going to be hard to cancel, they think twice before joining.

Be like Netflix, with their 25 billion dollars in revenue in 2020 and their “cancel anytime,” monthly subscription. Be transparent. Make it easy to cancel.

What’s next for memberships

The offering and the way you deliver value has to continue to evolve all the time.

As the world opens up again, there is still a lot of uncertainty. Now is the time to really keep your eye on engagement and member retention.  As we move into this new normal, how can you continue to serve people so that they stay engaged?

Organization

In your organization, be thinking about how to optimize the roles you have to better support serving your members. What functional areas overlap, how can they re-organize accordingly?

This re-organization emphasizes sustainable growth that balances acquisition, engagement, and retention to optimize revenue and membership.  

Utilizing the whole “funnel” 

Consider the shape of a funnel. If the neck is traditionally where the transaction occurs, the bowl of the funnel is where your transaction actually begins. This is the place where you are building deeper connection and loyalty – before customers actually sign up for your product or service. 

Looking at the relationship this way avoids the crush in the neck of the funnel and makes the entire transaction more comfortable.

Pricing

Looking at pricing as a tactic, not a strategy. If customers are hesitant to sign up, is there a place for a lighter membership? Is there a premium offering that people can experience before they are spending money with you? 

Make your pricing as simple as possible. Make it easy for people to sign up and recognize the value that they're getting. This helps them relax into their subscription (and avoids subscription fatigue).

Changing “freemium” offerings

In 2020, a sense of social responsibility for the community resulted in many organizations providing free services to help people who were suffering. Now’s the time to evaluate what should stay free and how to ease back into payments. 

Onboarding

Considerate onboarding sets the stage for a long and productive relationship with customers.

If your organization establishes the right habit when somebody first engages with you, that's going to pay dividends down the road. 

The best way to improve retention, even through turbulent times, is by helping customers to 

  • Identify ways to get the most value
  • Become the most connected
  • Make the best use of your products/services  

This help in the beginning decreases the chances of cancellations later on.

Customer success 

When you offer subscriptions as a service instead of as a product, it becomes more important to make sure that customers are using the product that they're paying for. 

This moves from customer support to customer success.

  • Customer support:  Reactive, the idea of fixing something that's broken or solving a problem when someone complains
  • Customer success: Proactive, reaches out to new customers, explains how they get the value from their subscription, and commits to doing everything possible to make sure that they’re delighted and engaged

Unlike customer support that’s episodic and uncertain, customer success is a disciplined, daily practice. 

Technology

Every organization is a technology organization. It’s no longer okay for anyone in the organization to say they aren’t technical.  Right now, it's clear that the technology piece is not just a  supporting function, a wrapper for the value  - it is the value. 

This is really important both in terms of making sure everyone in the organization understands this and has a level of tech literacy that allows them to work proactively for an excellent user experience.  

The membership economy and the new normal

If there's one thing to remember from the last 15 months it's this: you need to love your customers and their mission. This includes valuing what they're hoping to do on their journey more than any particular product you have or any feature you’re offering.

More than anything you offer, the relationships you build as we move into the future will sustain your organization – through this crisis and whatever comes next.

Build yourself with Sidecar

If you’re ready to increase your membership organization’s revenue, connect with an entire community of purpose-driven leaders and grow yourself, we’re ready to help you do it.

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Suzannah Kolbeck

Suzannah Kolbeck writes, paints, and rides horses in Baltimore, MD. She is the author of Between the Cracks: Urban Foraging for Medicinal Plants, due out in the fall of 2021 from Akinoga Press.

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