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“Membership is an attitude, an emotion”: How publishers can find their super users, master the forever transaction, and build recurring revenue

Publishers investing in generating recurring revenues from their readers would find a useful manual in the book The Membership Economy by Robbie Kellman Baxter. Those who plan to, or are already driving revenues through subscriptions, can look into deepening relationships with their readers through a membership strategy.

Baxter has extensive experience consulting with companies like Netflix, SurveyMonkey and Yahoo.

“Logical extension of subscriptions”

“Membership is an attitude, an emotion,” she writes in the book. “A subscription is a financial arrangement. It’s quite possible for something to be both a subscription and a membership organization. In fact, the Membership Economy is the logical extension of subscriptions.”

Baxter offers a well-researched look at how a variety of organizations have succeeded with membership strategies, and how others can replicate that success. The book contains a wide range of examples, case studies and helpful summaries. 

Having seen and experienced the challenges of building long-term sustainable relationships involving membership organizations, Robbie Kellman Baxter offers clear examples and straightforward advice on how to achieve success in both the nonprofit and corporate sectors.

Howard L. Wollner, Board Member, NPR Foundation

The Membership Economy is divided into four sections. The first section is a multi-chapter introduction to what a membership economy is, why it matters, and its many faces. The second looks at what works and doesn’t work in building and managing membership organizations. The third section introduces the six overarching categories of membership economy organizational models. It goes on to offer an overview of different organizations that have built their memberships around specific strategies like online subscriptions, community, and loyalty models. 

The last section goes over how various organizations, both startups and mature organizations, have successfully transitioned into membership. It shares examples from News Corp, Facebook, LinkedIn, Pandora and Netflix that show how these companies built revenue-generating businesses based on membership. 

“Future of all business models”

According to Baxter, “Membership is the future of all business models, with an emphasis on formal, ongoing relationships. I believe it is replacing the transactional model, and organizations that don’t evolve will fail.” 

An organization able to build relationships with members—as opposed to plain customers—has, as we’ll see, a powerful competitive edge. It’s not just changing the words you use; it’s about changing the way you think about the people you serve and how you treat them.

Robbie Kellman Baxter, The Membership Economy

A membership economy offers the following benefits:

  1. It creates recurring revenue and removes lumpiness. Having monthly subscription revenue can smooth out the peaks and valleys in annual sales.
  2. It builds a more direct relationship with readers. This also strengthens the brand by putting customers at the organization’s center.
  3. It generates an ongoing data stream that can be used to improve services and identify opportunities to increase satisfaction.

Baxter digs deep into the nuts and bolts of creating membership and paid subscription products — including more complex areas like billing, retention and churn. She distills her findings into best practices that publishers can select and apply according to their requirements. 

“See themselves as part of this bigger trend”

The most important shift that an organization can make to create a successful membership strategy is in its mindset and culture. Baxter writes, “What makes a membership organization is the attitude of the organization and the feelings of its members—not whether members subscribe. Companies’ failure to see themselves as part of this bigger trend can limit their potential to build relationships and strengthen their models.”

The Membership Economy is all about putting the customer at the center of the business model rather than the product or the transaction. Every organization should be focused on the customer. The business model and organization need to support this customer-centric model.

Robbie Kellman Baxter, The Membership Economy

Customer retention, rather than customer acquisition, should be the top priority in a membership strategy. Baxter suggests such businesses to tailor their offerings to meet the evolving needs and expectations of their customers. People stay engaged and satisfied when the member-to-benefit ratio is high. Thus publishers should also track metrics for customer satisfaction and tinker with products, services and consumer interactions to attract new members and retain existing ones. 

“Extend the brand’s reach and value”

Katie Vanneck-Smith, who was the Chief Marketing Officer at News UK—currently the Co-Founder and Publisher at Tortoise—oversaw News Corp’s addition of a digital platform for news. She recognized that once readers started getting their news online, their attitudes and expectations about pricing and value would change dramatically. This led her to rethink the company’s offerings.

Back then, circulation was the number that mattered to the publisher. It drove ad sales and prices, that had historically been its primary revenue source. Vanneck-Smith strove to change that mindset. Instead of thinking about circulation and advertising, she focused on creating bundles of content and value that were consistent with News Corp’s various brands.

Over time the whole organization started using the language of membership instead of subscription, emphasizing the emotional connection it has with its readers. Vanneck-Smith also tried out unusual ways (at that time) to connect with members. For example, when new readers signed up with News UK—a subsidiary of News Corp—they received a customized personal invitation to meet with the editor. 

The publisher also invited a few hundred Sun Times readers to a ‘cocktails and canapes’ event which featured a war photographer—access to a very special experience for members, writes Baxter. We now have a variety of publishers like the Guardian and Slate among others, that are deepening relationships and generating revenues by organizing events for members. 

According to Vanneck-Smith, “The idea was that moving from offline to digital was about more than putting the newspaper online, but rather taking advantage of digital technology to extend the brand’s reach and value.” 

“Beginning of the coming change”

Vanneck-Smith has led The Times, The Sunday Times, and The Sun’s marketing organizations into the digital era and transformed their direct relationship with readers through the development of Times+ and Sun+ membership and paywall offerings. The result of her efforts has been that readers seem willing to pay for the digital bundles, even after over a decade of free digital, comments Baxter.

“Business itself is changing. Software as a service, the sharing economy, digitization of physical goods, and the arrival of virtual goods—these trends represent only the beginning of the coming change,” writes Allen Blue, Co-founder of LinkedIn, in the foreword to the book.

“As the cost of physical goods drops due to automation, as the world of manufacturing becomes massively distributable through 3D printing and other cheap manufacturing technologies, as just-in-time logistics become a commodity, the whole idea of owning things is going to change.

“And that’s where Robbie begins her discussion: the swinging of the pendulum between Membership and Ownership. It’s on its way to Membership. And this time, it might end up staying there.”