As marketers, we’re always on the hunt for innovative ways to engage audiences and drive sustainable growth. And these days, there’s one approach that’s been getting a lot of traction: the membership economy.
The concept is simple enough – instead of chasing one-off transactions, companies focus on cultivating ongoing relationships and recurring revenue streams through paid membership or subscription models.
Not that it’s a new concept by any means, as the Automobile Association likes to point out, but it’s an enticing pitch in today’s experience economy. Customers get special access, perks and a feeling of belonging. Businesses get reliable cash flow and powerful data to optimize offerings.
But as with any hot trend, we need to look beyond the hype. The membership model isn’t a silver bullet, and it comes with its own unique challenges. As a proponent of “unconventional” thinking in marketing, I say we examine this phenomenon through a balanced lens.
The Pros of Membership
Let’s start with the upside that has brands and investors going all out over memberships. At its core, the model incentivizes companies to be customer-obsessed in an unprecedented way.
As Robbie Kellman Baxter outlines in her book “The Membership Economy“, success hinges on delivering amazing experiences that keep members engaged and retained over the long haul. It’s about nurturing lasting relationships, not just ringing the cash register. This is something of a holy grail in modern marketing.
This dynamic unlocks all kinds of juicy opportunities on the marketing front. With a steady stream of subscriber data at our fingertips, we can personalize and adapt our tactics more precisely than ever. We gain visibility into the entire customer lifecycle, not just single transactions in a vacuum.
And let’s not forget the reliable recurring revenue that comes with a paid membership base. With that financial runway, companies can reinvest more into R&D, customer service and the overall experience. It’s effectively marketing’s dream scenario.
Potential Pitfalls to Watch
But as alluring as memberships might sound, they aren’t a walk in the park either. With great power (read: customer data) comes great responsibility. Maintaining a compelling subscription offering takes serious commitment.
Slack took great care in nurturing its base of paid memberships in the early years, struggling to provide enough value and favoring teams over individuals. And we’re hearing more groans about streaming fatigue and subscription overload as customers find their bank accounts being whittled away. Once the novelty fades, memberships are just as vulnerable to churn as anything else.
Speaking of which, managing recurring billing and preventing involuntary churn is its own beast. The last thing you want is angry members ranting on Twitter about unwanted charges or expired cards. Creating a frictionless experience and retaining loyal customers isn’t as easy as one might think.
Perhaps the biggest wildcard, though, is the psychological side. Customer expectations and habits are deeply ingrained after decades of one-off transactions. Convincing folks to embrace memberships – and stay engaged enough to renew – requires fundamentally changing entrenched behaviors. No small feat.
Real-World Applications to Learn From
To see the membership economy’s strengths and weaknesses play out, we need look no further than a few familiar names that have wholeheartedly embraced the model:
Amazon Prime is probably the most iconic example, going from free shipping perk to all-encompassing membership that bundles everything from video to groceries. Even as a Prime “veteran”, I’m amazed by the sheer breadth of services they keep baking in to drive annual renewal after renewal (109 million members and counting!).
Of course, Amazon has the luxury of scale most players can’t match. For a more niche approach, check out BarkBox – the ultra-savvy dog subscription service that had pup parents hooked from day one. Frequent new product drops, a slick community and highly Instagrammable unboxing experiences keep tails wagging.
Sticking closer to us marketers, there’s the American Marketing Association’s membership program. This oldie-but-goodie gives paying members access to premium content, training, events and – perhaps most tantalizing – exclusive networking opportunities with other elite industry pros.
The value prop is clear, but maintaining enticing enough offerings year after year to justify dues is always top of mind (which perhaps explains their new certified pricing models). Some might say AMA memberships are more geared for company-paid subs versus individuals. But it shows the model can work in our B2B world.
The Path Forward
Given the mixed bag of benefits and challenges with the membership model, what’s a marketer to do? Reject the trend outright? Preemptively panic about our transactional fate?
Neither extreme strikes me as the right call. As with most things in business and marketing, nuanced thinking wins out. The question isn’t “membership or no membership?” – it’s “what aspects of the membership mindset should we embrace?”
Because like it or not, the principles behind the membership wave – stellar customer experiences, ongoing data-driven optimization, sustained relationships over one-off transactions – represent the future for brands wanting to stay relevant and competitive.
Sure, outright paid membership subscriptions might not be an optimal fit for every single company. But doubling down on recurring engagement, personalization and first-class user experiences? That’s a universal must for long-term success, membership model or not.
So by all means, let’s borrow generously from the membership playbook – laser focus on stellar service, insatiable appetite for user data and delivering delight consistently over time. Just be pragmatic about whether boxed subscriptions or literal memberships make sense for your specific business and customers.
In the end, memberships are simply a freshened-up means to an already critical end: providing amazing value that keeps people coming back for more, year after year. Unconventional takes on conventional wisdom are what drive our marketing industry forward.
And I, for one, can’t wait to see where this evolution takes us next.
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Post blurb:
Membership marketing is not just a trend – it’s a strategic approach that can transform the way brands connect with their audience. Discover how incorporating membership into your marketing strategy can drive sustainable growth.
#MembershipMarketing #MarketingStrategy #DigitalTransformation
Disclaimers:
The views expressed herein are personal and do not reflect the views of any of my clients, partners or employers. Some links are affiliate links.
Photo Credit: Photo by Mick Haupt on Unsplash
Original article: https://www.activelinkmedia.co.za/your-marketing-crystal-ball-is-cloudy-embrace-co-creation-with-customers/