Sam Jordan
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This document discusses how to build a successful membership business model. It notes that while 70% of businesses see membership/subscription models as the future, only 7% currently generate significant revenue this way. It emphasizes that the customer experience, including engaging content and community, is crucial for driving ongoing relationships over time. Additionally, it stresses the importance of having the right capabilities around products, marketing, data, partnerships and delivery to maximize revenue from subscriptions, transactions and other sources. Finally, it provides tips for using membership economics, such as focusing on compelling propositions and the right pricing to find the right financial balance.
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- 1. `
- 2. Membership Economics: How to make money in the Membership Economy
- 3. This isn’t about the difference between Membership and Subscriptions The Subscription Economy? The Sharing Economy? The Membership Economy?
- 4. Subscriptions Purely and simply a way of paying for something And one way to pay for membership Membership Something you feel part of and connected to emotionally And it may even be free Utilitarian Meaningful Convenient Fulfilling Ongoing Relationships
- 5. This is about a new way to think about and grow customer relationships An ongoing relationship, based on an experience, driven by engagement, that delivers value over time
- 6. 70% of businesses said they think membership and subscription models are the future commercial model of their industries... Quantitative and Qualitative Study However, only 7%are currently generating significant revenue in this way
- 9. Revenue “It’s really hard to be good at multiple revenue lines” Ed Roussel, Chief Innovation Officer, Dow Jones Subscriptions Transactions Advertising Affiliates/Partners Direct Indirect
- 12. Product “Product and the product experience is absolutely the most important thing. Get this right and it powers the marketing.” Barney Harrison, CMO, The Gym Group What you sell and how you sell it
- 14. Marketing “Engagement is absolutely one of the biggest priorities in our business” Karl Wells, General Manager Membership, The Wall Street Journal With a focus on engagement
- 15. Engagement driving revenue along a customer journey Transactions Advertisin g Affiliates Subscription s
- 16. Data “Our Community Analytics Team sits at the heart of the business.” Ben Ebbrell, Founder, SORTEDfood The fuel for everything
- 17. Subscription s Data can be used to maximize total customer value throughout the whole customer lifecycle Paywall Offers In Life SaveVisit Transactions Affiliates Advertisin g Subscription s Advertisin g Subscription s Subscription s
- 18. Partnerships Managing an ecosystem “No one is an island” John Donne
- 19. Complex multi-faceted customer propositions Creating the right mix of capabilities at the right investment level Specialist capabilities to unlock revenue potential
- 20. Delivery Model “Our biggest challenge was actually shifting to a D2C model and building the organization to be able to do that” John Fiedler, Head of Digital, Fox Core operational capabilities
- 21. But, at the heart of our model is the customer “The first question everyone asks, everytime about everything, is: What would this mean for our members?” Lisa Oswald, Head of Customer Services, Travelzoo
- 22. Using the model 1. Do I have a compelling proposition that customers will commit to? 2. Do I have the capabilities to deliver? 3. What revenue can I generate and how much? 5. Do the ‘Membership Economics’ add up for me? 4. What pricing model should I use?
- 23. It’s about finding the right balance for your business
- 24. Money’s the score not the game
- 25. Engagement Frequency Recency Depth Breadth Using leading metrics to provide focus and deliver financial targets
- 26. Key takeaways 1. You will lose money when you acquire a new customer, and you might make money if you keep them. 1. Experience and engagement are the key, these need to be backed up by realistic revenue modeling and pricing. 1. You have to be good at creating reasons for customers to stay, not just relying on reasons for them not to leave. 1. Reframe the metrics - KPIs!
- 27. Membership Economics: How to make money in the Membership Economy download @ manifestogrowth.com
- 28. 28